6/30/2009 @ 3:19PM

The Pirate Bay's Revolt

What’s the value of a site with millions of unique visitors, massive press attention and traffic that has doubled over the last year? If those millions of users are copyright-flouting filesharers who rebel at the site of big media collaboration, surprisingly little.

On Tuesday, the Web’s top bittorrent tracking and indexing site, the Pirate Bay, announced that it had agreed to sell itself to the Swedish gaming company Global Gaming Factory for the equivalent of $7.7 million, in a deal designed to make the site a legitimate media business that licenses content from media owners. But if that seven-figure sum seems paltry for one of the Internet’s top sites, it may be in part explained by the hundreds of comments that followed the deal’s announcement on the Pirate Bay’s blog.

“This is the ultimate knife in the back,” wrote a user with the handle “aut alex.” “Rest in Peace TPB, the biggest sellout i have seen in my lifetime.”

“In times of desperation, captains would destroy the ship and leave before the enemy would have the chance to capture it,” wrote another user. “I ASK FOR GRAVE AID THAT WE MUST DESTROY THIS SHIP BEFORE WE CAN LET THIS COMPANY TAKES OVER!”

After dozens of comments requesting a button be added to the site to allow users to delete their accounts and some even calling for cyber attacks to take the site offline, the Pirate Bay’s administrators added an account deletion button around noon Eastern time. But they pleaded with their users for understanding. “Some things needs to be reborn and rebooted,” read the site’s blog. “Let’s make this into something good!”

But the Pirate Bay’s likelihood of being “rebooted” as a profitable business that respects copyright are slim, says Eric Garland, chief executive of Big Champagne, a filesharing research firm. “When you think of all of the copyright-infringing companies that tried to relaunch or rebrand, the arc is pretty well established,” he says. “It’s easy to give away music without authorization, and far less popular when you try to offer it legitimately.”

Garland points to the long history of copyright-infringing sites that have attempted to become legitimate, only to lose their users and become a money-losing shell of their former selves.
Napster
, for instance, had a near monopoly as a source of MP3 files when it was sued by the Recording Industry Association of America in 1999. But after its $5.3 million acquisition by Roxio in 2002, its reincarnation as a paid streaming music site never achieved more than a small fraction of that success.

After Grokster, a Napster-like filesharing service lost a similar lawsuit in 2005, its assets were purchased by the music service MashBoxx, which faced funding problems and never launched. Janus Friis and Niklas Zennstrom, founders of the filesharing platform Kazaa, did manage to cash in on their peer-to-peer data transferring technology, admits Garland. But only after implementing it in the voice-over Internet protocol start-up Skype and selling it to
eBay
.

“In my memory, this goes two ways,” says Garland. “Either the founders use the technology to create a strictly unrelated business, or the story ends in tears.”

The Pirate Bay’s founders had little choice about their decision to transform their massively popular filesharing service. A Swedish court ruled in April that the three founders were guilty of copyright infringement, and sentenced them to $3 million in fines and a year in prison apiece.

The Global Gaming Factory’s chances of capitalizing on the situation, however, are slim, says Forrester research analyst Sonal Gandhi. Although the Swedish gaming company hasn’t spelled out its plans for the Pirate Bay, Gandhi suggests the company can either charge users to download files, or attempt an ad-supported model that reimburses content owners–a strategy that’s likely to limit the content available through the Pirate Bay.

So while GFF is acquiring a site with 20 million unique visitors by the company’s count, it’s unlikely to keep a hold of those copyright-defying users, Gandhi says. “If the Pirate Bay takes this audience and manages to convert them to paying music buyers or to a workable ad-supported digital download, they’d have really achieved an amazing feat,” she says. “In the filesharing world, people move very quickly from one site to the other.”

The Pirate Bay’s defectors will have plenty of other options. Dozens of second-string bittorrent tracker and index sites have avoided the Pirate Bay’s level of notoriety but are easily accessed by a quick
Google
search, including Mininova, isoHunt and Demonoid. (See: “Why Google is the New Pirate Bay.”)

Not all of the site’s users are so fickle. In response to the Pirate Bay’s administrators blog announcement that they would add an account deletion button, several commenters responded defending the site’s decision and voicing their support for the longtime copyright fighters. But another commenter with the username driver779, who likely spoke for millions of other users, made clear just how smoothly the site’s audience will migrate to greener pirate pastures.

“You still sell outs, no matter how you put it,” the user wrote. “Thanks for the ride. There are other sites out there.”